Singapore’s banking sector is experiencing significant client attrition, with nearly 90% of banks reporting losses over the past year due to delays and inefficiencies in onboarding processes. This marks a 35% increase from 2023, according to a study by Fenergo, a leader in client lifecycle management. The report highlights that Singapore has the highest client loss rate globally, surpassing banks in the US, UK, and Japan.
The inefficiencies are largely attributed to poor data management and siloed workflows, with 91% of respondents citing these as key factors. Additionally, 79% pointed to inadequate customer experiences, and 47% blamed overly complex onboarding processes. These challenges arise as Singapore’s financial institutions strive to comply with the national anti-money laundering (AML) strategy, introduced after a major scandal in 2023.
Cengiz Kiamil, Managing Director at Fenergo, noted, “It’s no coincidence that the spike in banks losing clients because of burdensome KYC and onboarding closely follows one of the biggest money laundering scandals in Singapore’s history.” He emphasised the need for banks to enhance client due diligence to mitigate risks.
Despite the challenges, there is a growing interest in AI-driven solutions, with 38% of banks planning to deploy AI to boost operational efficiency and 30% aiming to improve data accuracy. Kiamil stated, “In today’s fast-evolving regulatory landscape and rising financial crime, it has never been more important for firms to strengthen their client onboarding and KYC procedures.”
Fenergo’s report, “KYC in 2024,” provides detailed insights into the time and cost implications for banks conducting KYC tasks, underscoring the urgency for digital transformation in Singapore’s banking industry.
